Every trading day, be ready to attack the market instead of reacting to the
market.

You will know where the key technical resistance and support levels are and what
the market is likely to do next. iStock will arm you with a target list of stocks
to buy and sell - right now - based on our exclusive, proprietary trading models.
You will also receive monthly ETF model portfolio and trend trader model portfolio

Two Week FREE Trial

Streaming Movies - How Netflix Would Fare In 2013?

(By Mani) Heading into 2013, Netflix, Inc. (NASDAQ: NFLX) would remain the dominant streaming video service provider by a wide margin. Currently, it accounts for 33 percent of downstream traffic on fixed networks in North America during peak hours, according to Sandvine.

Netflix is the world's leading Internet television network with more than 30 million members in 40 countries enjoying more than one billion hours of TV shows and movies per month, including original series. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen.

While competing video services, including Amazon, Hulu, and HBO GO, are often mentioned in the same breath as Netflix, these services still trail Netflix by a wide margin. In other words, Netflix generates 18 times more traffic than Amazon, 22 times more traffic than Hulu, and 62 times more traffic than HBO GO.

"Although Amazon and HBO do not report their streaming video viewer figures, we know Hulu has approximately 3 million subscribers in the US versus 24 million paying Netflix streaming subscribers," BMO Capital Markets analyst Edward Williams said in a client note.

As a result, competing services are unlikely to challenge Netflix for market dominance anytime soon.

Moreover, the recent deal with The Walt Disney Co. (NYSE: DIS) is a major win as the deal has strengthened Netflix's exclusive content in differentiating its streaming video service among competitors and is expected to have a positive impact on US streaming subscribers trends.

The new multi-year licensing agreement makes Netflix the exclusive U.S. subscription television service for first-run live-action and animated feature films from The Walt Disney Studios.

Netflix captured the exclusive rights for Disney movies in the pay window starting for films released in 2016. The pay window is about a year post film release and so Netflix will start airing the new 2016 Disney film releases on its service starting the end of 2016 / beginning of 2017.

"While the companies did not provide financial details of the agreement, we believe the deal is in the ballpark of $300 million per year. We expect the company to continuously adjust its content portfolio with changes in demand from the subscriber base," Williams noted.

Meanwhile, Netflix would go social in 2013. Congress passed a new bill amending the Video Privacy Protection Act, which would be signed into law shortly. The bill allows companies such as Netflix to share video preferences of consenting customers unless they opt out.

Netflix has confirmed the company will introduce social features for US members in 2013 that might be integrated with Facebook, Inc. (NASDAQ: FB) and could boost the domestic subscriber base as it may become easier to share what you're watching.

On the flip side, Netflix service experienced two disruptions around the holidays – one brought on from a technical error at AWS and the other from an internal error. But, these outages are not expected to have a sustained negative impact on the Netflix subscriber base.

"At the same time, the widespread coverage of the outages highlight, in our view, how critical the service is becoming to tens of millions of subscribers," Williams said.

"We do not expect the new streaming service will have a meaningful impact to Netflix's business given that Redbox has a significantly smaller library of streaming content library that excludes TV shows and primarily consists of the same movies from EPIX available through Netflix," Williams noted.

In addition, Amazon recently launched Amazon Video service on the iPhone and iPod Touch, further extending the reach of its video services. Amazon also entered an exclusive agreement with Turner Broadcasting and Warner Bros. Amazon recently shuttered plans to offer a $7.99-a-month Prime subscription after a two-week test period.

"Although Amazon Prime offers subscribers a compelling video streaming service, we do not believe it rivals that from Netflix," the analyst added.

Netflix's long-term strategy and first-mover advantage remain intact as its streaming business continues to grow in the US and abroad. Netflix is poised to capitalize off the growth of streaming video over the next several years as it expands the breadth of its streaming content and penetrates additional international markets.

Fundamental data is provided by Zacks
Investment Research, and Commentary, news and Press Releases provided by
YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not
intended for trading purposes or advice. iStockAnalyst.com is not an investment
adviser and does not provide, endorse or review any information or data contained
herein.
The blog articles are opinions by respective blogger. By using this site you are
agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither
iStockAnalyst nor any of its independent providers is liable for any informational
errors, incompleteness, or delays, or for any actions taken in reliance on information
contained herein. You are solely responsible for the investment decisions made by
you and the consequences resulting therefrom. By accessing the iStockAnalyst.com
site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based
on EOD data.